Necessary Skills to Be a Strategic Financial Advisor in 2022


Building your advisory practice is a journey. You may still be trying to find ways to charge for advice that you’ve been offering so far for free, or you may be selling bundled, fixed fee advisory services now. Either way, at this time, the demands being placed on you and the work that you’re doing in response, is new and unique.

As I write this, we’ve just entered another new year and there’s another tax season looming. You know the tax code, you’ve studied the legislation, you care about your clients’ success. But are those skills enough for this work?

What skills do you need to be a strategic advisor?

Here are the key skills you’ll need to become a successful strategic advisor. Having these in your professional skillset will help you better manage your own firm as well as explore opportunities for your clients.

1. Client relationship management 

Connecting with clients and building trust is necessary for long-term success. Your clients are putting their businesses, finances, and potential growth in your hands. So, you need to earn and reconfirm that trust on a regular basis.

First, when onboarding new clients keep things professional. You don’t know your clients personally yet, so at the start, it’s best to keep things efficient and respectful. Retain this attitude as you get to know your clients and their businesses, and begin loosening up or adjusting how you work with them as your relationship grows. To do this successfully, establish a process for communication, encourage your clients through the planning process, and don’t lose sight of their needs. 

Emotional intelligence and personalized care are just as important in this instance as strong and consistent communication. The more you integrate these ideas, the more likely you are to connect with and keep your clients.

2. Understanding business legislation and regulations

In order, to do your job well and focus on successful advising, you’ll need to be sure that you have a pulse on relevant accounting terms, legislation, and regulations. Your clients will expect you to be an expert. You don’t necessarily have to understand everything, but you should be aware of any major movements or regulations that may affect your clients.

The more consistently you’re able to integrate these technical issues into reporting and conversations, the more informed and prepared your customers will be. Remember, they’re coming to you with expectations, and not seeking out these things on their own. It’s up to you to keep track of the larger landscape in order to better prepare them for things outside of their immediate business.

3. Research and reporting

Your research as a strategic advisor goes beyond understanding regulations and codes. You also need to be able to dig deep into the business history of your clients. This will ensure that you understand why and how they’ve reached their current position. Having this context in mind will help you prepare to effectively report your findings and make recommendations that your clients will trust.

As far as reporting goes, you need to be sure that you’re presenting information in a simple and digestible way. You’re hired to make sure that business owners can continue running their businesses without having to worry about the larger financial details. The more clearly you’re able to present cash positions, revenue, payments, and sales forecasts, the less time you have to spend chatting through recommendations and getting clients up to speed.

4. Risk assessment

Part of your reporting and research is being able to digest and convey the amount of risk associated with a given decision. After all, something incredibly lucrative may seem like a sure fire win, but without a full risk analysis it may end up being a death trap for your clients. It’s up to you in this instance, to convey what types of risks are involved, how likely success is, and what it would take to achieve specific goals.

This is where scenario analysis can emerge as a vital tool for you to leverage in your assessments. If you or your client are curious about potential results, explore what the best, worst and expected scenarios will be. This can provide your clients with a tangible example of what could happen, should they make a specific decision. The more easily and effectively you can convey risk, the more likely that your clients stick your suggestions.

5. Detail orientation

This is somewhat of a soft skill, but it applies to every other skill on this list. It can become all too easy to let small mistakes or reporting slip by. That’s why it’s so vital that you are keeping things clear, concise and catching any mistakes before they happen.

Keeping clean financial statements and reporting systems ensures that all of your clients’ information is kept secure, accurate, and available. The more often you double and triple-check results, the more likely it is that you’ll be able to prepare statements mistake-free. Really, being able to eliminate general mistakes is the best way to gain trust, build support, and easily showcase your ability.

What’s the most important skill of a strategic advisor?  

When you think about what’s most important for small business advising, of course, the skills mentioned above come to mind. Sure, the rules, codes, and accounting principles matter, but in order to apply those to your advising services and successfully help your clients, you’ll need to do more.
The most important skill to hone to be a successful strategic advisor is knowing how to ask the right questions. You need to be able to dig into the minds of your clients and uncover the information that matters to build and maintain the best forecast, and ultimately move their business forward.

To do your work well, you’ll need to clearly represent and explain the opportunities, limitations, and goals of the business. That information is living inside the mind of the small business owner.  Your number one job as an advisor is to dig it out! 

You need to be able to dig into the minds of your clients and uncover the information that matters.

You have to do more than hear your clients.  You need to engage and ask questions that will uncover the right problems to solve and the nuggets that will inform the creation of a better forecast.  Questions that will help move them toward their goals.

What questions should you ask your clients?

You may be wondering what these questions sound like, and how this might be different from the work you already do. It can be helpful to illustrate it in terms of an example.  

Imagine your typical small business client and their business.  You may know financial facts about the recent state of their business.  These facts could be big things, like lower than usual profit, or dips in cash.  Or they could be smaller elements, like their accounts receivable balance being higher than usual, or low revenues.  You can see these on their monthly reports.  You may also know certain tax implications that will affect them or modifications they can make to maximize tax savings.  

All of these are important elements to be aware of so that your clients can better understand their current situation.  As you know, these insights come from financial and accounting information that’s in the past.  But you’ll need to move a step beyond that.  To truly advise your clients, you need to build a roadmap to move them forward. And to do that you’ll need to know what their expectations, goals, and initiatives are for the next week, month, year, and beyond. 

Use conversation to guide your questions

You shouldn’t expect to run through only a few questions with your clients and get results. You need to orient them to their results first. To do this, start with a deeper than usual conversation about their accounting and financial results — the numbers to date.  From our example, this would include understanding more about what contributed to the changes in profit, and cash.  What happened in their business during the last month that was different in areas related to those figures?  

After you understand what happened, ask what they are doing now to change it. Then talk about next steps. What have they considered trying, what are they open to trying, what are their limitations, and how does all of that line up with their overall business goals?  Dig in.  Keep asking until you arrive at answers that help you build solutions — these become new objectives and financial goals.

Develop the forecast

Once you arrive at the goals part of the conversation, it’s time to turn your attention to planning ahead by forecasting.  By knowing what’s going on with their business, you can interpret those elements to better craft your estimates.  

Be sure to continue asking clarifying questions section by section. Start with revenue and sales, and address any questions about specific line items. The questions here are about opportunities and limitations.  

  • What are their real sales possibilities?  
  • What are their expense limitations and can they be pushed?  
  • Are there opportunities that are not yet realized?  
  • What would be too much, too little?  
  • What would be beyond their capacity?  
  • You can even talk about capacity, and how it affects their ability to meet goals.  

Think of it like you’re painting a picture of their business, but with numbers and financial statements. The forecasted statements should tell a story. What will the projected profit be in 6, 9, 18 months? What will the projected cash and equity be?  

Those elements comprise the financial story of the business. Your job as a strategic advisor is to capture them, make them visible and bring them to life! And the conversations with your clients help you paint the picture.

Never stop asking questions

Be unafraid to ask questions quoteTrue “advising” is actually not in the giving of advice.  It’s in the questions: your ability to listen and probe — to dig into the mess and make sense of it. And to be unafraid to keep asking your questions in new and different ways.

Your ability to get to the bottom of why something happened will help you lay out a plan to change it.  But you’ll never know why until you ask, and you’ll have to ask in different ways until you arrive at an answer that can initiate change. 

Small business owners are busy. They’re relying on you to guide them, and part of that guidance is in your ability to hold time and space for these conversations. It can be hard to hold their attention in the beginning but don’t be deterred. These conversations are at the core of your work. And at the end of the day, no matter how hard it can be, your clients are counting on your guidance.  

Your clients don’t want just reports and data. They can’t do much with those things. They need your guidance to analyze the information and uncover why the numbers are what they are, and then explore what they can do differently to make them better.  

You have the power to help them change their course, and not just survive, but thrive. The accounting profession can even change the health of the entire small business economy! And it all starts with the right questions.

Kathy Gregory
Kathy Gregory
Kathy Gregory has over 20 years of experience in business development, including: financial forecasting, strategic planning, process development, project management, and mergers and acquisitions. She has worked in public and private, small to mid-size organizations doing business development, and strategic planning and implementation, working with executives, boards and their investors. At LivePlan Kathy runs the specialized program for Strategic Advisors. She is a graduate of the University of Oregon.
Posted in Advice for Strategic Advising, Working with Clients